Rupee declines to one-month low on growth concerns
Business Standard, June 19, 2009, Section II, Page 3
AGENCIES Mumbai
The rupee closed at a one month low as concern that the worst of the global economic slump isn’t yet over prompted foreigners to trim their local holdings of stocks.
The currency fell for a third day, declining 0.1 per cent to 48.215 a dollar at the close, the lowest since May 15.
Overseas funds sold more Indian shares than they bought for a third straight day and the benchmark Bombay Stock Exchange Sensex posted its biggest two-day decline since March 3.
“Global funds are far from confident about the prospects of equities in developing nations, which is resulting in outflows,” said K V Mallik, treasurer at state-owned UCO Bank in Kolkata. “I don’t think the trend will reverse anytime soon and the currency will bear the brunt.” Global investors sold a net $241 million in the three days to June 17, according to the Securities & Exchange Board of India, trimming this month’s purchases to $1.1 billion. The currency has rallied 5.2 per cent this quarter.
The rupee rose as much as 0.4 per cent earlier today on speculation exporters will take advantage of its drop past 48 to convert overseas earnings.
Offshore contracts indicate traders bet the rupee will trade at 48.40 per dollar in a month, compared with expectations for a rate of 48.28 yesterday. Forwards are agreements in which assets are bought and sold at current prices for future delivery. Non-deliverable contracts are settled in dollars. Bonds gain
Bonds rose for a second day, their best run in a month, on speculation surplus cash in the financial system is fueling demand for debt.
The yield on the most-traded note maturing in 2014 dropped as banks, the biggest buyers of government securities, probably increased purchases as their deposits rose.
The yield on the most-traded 6.07 per cent note due May 2014 fell two basis points to 6.59 per cent at the close, according to the central bank’s trading system. The price climbed 0.08, or 8 paise per 100-rupee face amount, to 97.83. A basis point is 0.01 percentage point.
Indian lenders must invest at least 24 per cent of their deposits in government bonds and other approved securities. A government report today showed wholesale prices fell for the first time in three decades. Bank deposits rose by Rs 15,730 crore in the two weeks to May 22. That was the fifth consecutive two-week period when bank deposits rose, according to data from the central bank. Call ends flat
Call money rate ended unchanged today as abundant liquidity enabled borrowers to raise funds at the lower end of the interest rate corridor, dealers said. One-day call rate ended at 3.25-3.30 per cent, unchanged from Wednesday. CBLOs ended at a weighed average rate of 1.98 per cent as against 2.31 per cent on Wednesday
Business Standard, June 19, 2009, Section II, Page 3
AGENCIES Mumbai
The rupee closed at a one month low as concern that the worst of the global economic slump isn’t yet over prompted foreigners to trim their local holdings of stocks.
The currency fell for a third day, declining 0.1 per cent to 48.215 a dollar at the close, the lowest since May 15.
Overseas funds sold more Indian shares than they bought for a third straight day and the benchmark Bombay Stock Exchange Sensex posted its biggest two-day decline since March 3.
“Global funds are far from confident about the prospects of equities in developing nations, which is resulting in outflows,” said K V Mallik, treasurer at state-owned UCO Bank in Kolkata. “I don’t think the trend will reverse anytime soon and the currency will bear the brunt.” Global investors sold a net $241 million in the three days to June 17, according to the Securities & Exchange Board of India, trimming this month’s purchases to $1.1 billion. The currency has rallied 5.2 per cent this quarter.
The rupee rose as much as 0.4 per cent earlier today on speculation exporters will take advantage of its drop past 48 to convert overseas earnings.
Offshore contracts indicate traders bet the rupee will trade at 48.40 per dollar in a month, compared with expectations for a rate of 48.28 yesterday. Forwards are agreements in which assets are bought and sold at current prices for future delivery. Non-deliverable contracts are settled in dollars. Bonds gain
Bonds rose for a second day, their best run in a month, on speculation surplus cash in the financial system is fueling demand for debt.
The yield on the most-traded note maturing in 2014 dropped as banks, the biggest buyers of government securities, probably increased purchases as their deposits rose.
The yield on the most-traded 6.07 per cent note due May 2014 fell two basis points to 6.59 per cent at the close, according to the central bank’s trading system. The price climbed 0.08, or 8 paise per 100-rupee face amount, to 97.83. A basis point is 0.01 percentage point.
Indian lenders must invest at least 24 per cent of their deposits in government bonds and other approved securities. A government report today showed wholesale prices fell for the first time in three decades. Bank deposits rose by Rs 15,730 crore in the two weeks to May 22. That was the fifth consecutive two-week period when bank deposits rose, according to data from the central bank. Call ends flat
Call money rate ended unchanged today as abundant liquidity enabled borrowers to raise funds at the lower end of the interest rate corridor, dealers said. One-day call rate ended at 3.25-3.30 per cent, unchanged from Wednesday. CBLOs ended at a weighed average rate of 1.98 per cent as against 2.31 per cent on Wednesday
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